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Pension Protection Fund cuts levy by £50m 21 September 2011

The news comes after the PPF declared a £400 million surplus last year which will go towards the organisation’s aim of being entirely financially self-sufficient by 2030.

Today’s levy announcement follows news earlier in the year that the PPF is changing the way it calculates the levy, paid by all final salary pension schemes to fund the compensation pot paid to people whose employers become insolvent.

Alan Rubenstein, chief executive of the PPR, said today’s levy marks the second levy cut in two years and represents the lowest levy that the PPF has ever set.

He explained: “The further reduction in the amount of levy we want to collect again recognises our desire to protect employers and pension schemes which are still navigating choppy waters - while remaining mindful that we also have to protect our own financial position.

”That said, the £400 million surplus we posted last year showed that we remain on course for achieving our aim of being financially self-sufficient by 2030. And we expect to have built on that strong foundation when we announce our 2010/11 results later in the year.

"We can finally put in place the rules for our new levy framework which enable schemes to plan for their levy bills for the next three years. I would also encourage schemes to take risk reduction measures as they have a direct impact on the amount of levy they pay.”

Safety net

The Pension Protection Fund was set up under the provisions of the Pensions Act 2004 in April 2005 and is classified as a public financial corporation.

It has been established to pay compensation to members of eligible final salary and hybrid pension schemes when there has been a qualifying insolvency event and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.

 

Related reading:

- PPF website

- Pensions - Payroll World 

 

 

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